Promotion without pay rise is the trend with Singapore companies - Report

According to an independent research by Robert Half, a specialised recruitment company, it is only 17 per cent of all Singaporean companies which provide a pay hike with a promotion, reported Today Online.

The news portal reported that the managing director of Robert Half Singapore Matthieu Imbert-Bouchard said that promoting without a salary increase extremely common in Singapore. Notably, 100 Chief Financial Officers (CFO) and finance directors in Singapore were surveyed for the study.

The study also revealed that size of the company is immaterial as 21 per cent of medium-sized companies prefers to always give pay rises with a promotion. Meanwhile, it is only 15 per cent of both large and small companies who adhere to the trend.

Almost majority of the finance leaders who were surveyed said the primary reason for promotion without sanctioning higher pay is that the company directors want to assess the employee's performance first before the remuneration is increased, reported the news portal.

Some other reasons that came up during the survey were financial crunch, urgency to fill up the vacant positions.

"With Singapore's tight labour market and low unemployment rate, and in order to hold on to their top performers, employers need to reward their best employees by giving them career advancement opportunities," said Imbert-Bouchard, as reported.

Though receiving a promotion is "a clear sign of confidence in an employee", taking up one more senior role without sufficient rise in salary can bring one's motivation down, the expert argues. Moreover, this step might also prompt a good employee to change the job, he added.

"When employees don't receive a salary increase when promoted, it is vital to explain the reason, as well as potential targets that the employee needs to reach within a certain timeframe in order to receive a salary rise,"Imbert-Bouchard said.

When asked what an employee should do in such situations, Imbert-Bouchard said the person can negotiate the non-financial benefits.

"It is important for employees to remember though that the challenge of taking on a more senior role and additional responsibilities can result in more career advancement in the future, which eventually may make up for the lack of financial rewards," he said, according to the report.

"However, pay rises are a very effective retention tool. Many employees are prepared to work hard knowing the reward will be a promotion with a better salary and bonus," he added.